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Brown Says He’ll Sign California Bill Regulating Fracking

Sept. 12 (Bloomberg) -- California Governor Jerry Brown said he’ll approve regulations for hydraulic fracturing criticized by environmental groups as the state prepares for development of the largest shale-oil reserves in the U.S.

The third-largest oil-producing state, under a bill approved yesterday, would for the first time require permits to inject millions of gallons of chemically treated water underground to break up rock. Energy companies would also have to disclose the ingredients in fracking fluid and notify nearby landowners of their plans.

Technological advancements in fracking have ignited a boom in development of wells once deemed uneconomical, particularly shale oil. California’s Monterey Shale may hold 15.4 billion barrels -- two-thirds of the nation’s shale-oil reserves, according to federal estimates.

“There are still many unanswered questions,” the bill’s author, Senator Fran Pavley, a Democrat from Agoura Hills, near Los Angeles, said yesterday. “It is in the interest of all Californians to monitor and regulate these practices.”

Evan Westrup, a spokesman for the 75-year-old Democratic governor, said Brown intends to sign the bill into law.

The measure “comprehensively addresses potential impacts from fracking, including water and air quality, seismic activity and other potential risks,” Westrup said by e-mail yesterday.

Watered Down

The Natural Resources Defense Council, California League of Conservation Voters, Clean Water Action and Environmental Working Group, which backed earlier versions of the measure, withdrew their support, saying the bill was too watered down.

“This bill will not protect Californians from the enormous threats of fracking pollution,” Kassie Siegel, senior counsel of the Center for Biological Diversity’s Climate Law Institute, said yesterday “Fracking poses unacceptable risks to the air we breathe, the water we drink and our climate.”

The measure would require a study of potential air and water pollution and public health threats posed by fracking and other “enhanced extraction” methods including the use of acid to dissolve rock.

Lawmakers turned down proposals to suspend fracking until more is known and to require detailed disclosure of the chemicals used in fracking.

60 Years

Oil companies have safely used fracking in California for more than 60 years, according to the Western States Petroleum Association, a Sacramento-based industry group.

“Most of the oil that we’re going after is a mile and a half below the surface, even though the water table is only 500 feet,” Assemblyman Tim Donnelly, a Republican from Twin Peaks, said yesterday. “All that really matters is that well casing holds up, and in 60 years we haven’t had a single one fail.”

California’s 1,750-square-mile (4,530-square-kilometer) Monterey Shale formation, threading lengthwise through the San Joaquin Valley southeast of San Francisco, in the center of the state, may hold the largest deep-shale oil reserves in the world, the U.S. Energy Department estimates.

The 15.4 billion barrels would be enough to supply the U.S. for more than two years, the agency has said.

Development of the deposits could mean 512,000 to 2.8 million jobs by 2020, and add $4.5 billion to $24.6 billion to state and local tax revenue in that period, according to a March report by the University of Southern California, in Los Angeles. USC said the research, partially funded by Western States Petroleum, was conducted by an independent team.

To contact the reporter on this story: Mark Melnicoe in Sacramento at mmelnicoe@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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